Monday, April 28, 2008

Newspaper circ at 62-year low

The accelerating decline in circulation has brought newspaper sales to the lowest point in more than 60 years.

Based on the record 3.5% drop in daily circulation reported today for the nation’s largest newspapers, it appears that average daily circ this year will be no better than 50 million. If so, that would be the lowest level since 1946, when daily sales averaged 50.9 million, according to statistics provided by the Newspaper Association of America.

Though circulation has fallen back to pre-Baby Boom levels, the population has more than doubled since 1946. If you divide circulation by population, you will find that fewer than 18 out of 100 Americans today buy a daily or Sunday newspaper. Back in 1946, 36% of the population bought a daily paper and 31% took a Sunday edition.

While newspaper circulation has weakened since the 1980s, the decay has accelerated sharply since 2003, as illustrated in the chart below. Sunday circulation, which had been relatively more resilient than daily sales, now is falling more precipitously than daily sales. In the six-month reporting period ended on March 31, 2008, Sunday circ fell 4.2%, nearly a full point higher than daily circ.

Some of the circulation drop has been self-inflicted. As discussed here previously, a growing number of publishers have curtailed the expense of hauling papers to distant points to preserve vanity circulation that impresses neither advertisers nor shareholders.

While some publishers also have eliminated heavily discounted circulation, there is anecdotal evidence that other newspapers, including those in the San Francisco market, continue to offer such bargains as a yearlong subscription for a mere $20.

News of the worst newspaper circulation plunge in history coincided with a story today on the cover of Advertising Age, the bible fo the ad industry, which was entitled “The Newspaper Death Watch.”

Will the the tailspin in circulation and ad sales be accelerated by the growing accumulation of bad press about the press?

As a former newspaper and magazine publisher and current college journalism instructor, I think a major cause for the decline is that newspapers like the Boston Globe put all of their content online—even enhance it online—but not their ads. Why would advertisers buy print when it is reaching less and less people? Those people have not stopped reading the news, they just read it online for free.

Quick question. When newspapers "die," where will people go to read obituaries? Each individual funeral home web site? Another quick question. How much of the circulation drop is at big-city dailies? My guess is a lot of it.A third quick question. Can you give me an example of a medium that disappeared completely? I don't think the oldest medium is going to completely disappear

Maybe the newspapers should ask for an "excess profits tax" on Google and Yahoo. If it's good for the oil companies, it's certainly good for the search engines that have fatter margins and much higher returns on capital. After all, someone has to write the material put on Google, Yahoo, and the blogosphere, and why should other firms profit immensley while newspapers starve? Obama should lead the charge - the news media, including papers, are practically unpaid spokespersons for his campaign. He'll owe them bigtime when he gets elected.

Anonymous, I work for a community website that provides everything the newspapers provide (news, obits, sports, articles, etc.) and then some. It is easier to get the information you want or need in this format as well as being free...and it is a less expensive advertising medium for businesses.

About Me

Alan D. Mutter is perhaps the only CEO in Silicon Valley who knows how to set type one letter at a time.
Mutter began his career as a newspaper columnist and editor at the Chicago Daily News and later rose to City Editor of the Chicago Sun-Times. In 1984, he became No. 2 editor of the San Francisco Chronicle.
He left the newspaper business in 1988 to join InterMedia Partners, a start-up that became one of the largest cable-TV companies in the U.S.
Mutter was the COO of InterMedia when he moved to Silicon Valley in 1996 to join the first of the three start-up companies he led as CEO.
The companies he headed were a pioneering Internet service provider and two enterprise-software companies.
Mutter now is a consultant specializing in corporate initiatives and new media ventures involving journalism and technology. He ordinarily does not write about clients or subjects that will affect their interests. In the rare event he does, this will be fully disclosed.
Mutter also is on the adjunct faculty of the Graduate School of Journalism at the University of California at Berkeley.